Ask the Expert

Planning for the Worst

How to determine whether long-term care insurance is right for you.By Greg Saitz

First it happened to her mother. Then decades later, it happened to Marsha Robinson’s father, and finally her mother-in-law. All had health issues that required long-term care, but none had specific insurance covering their nursing home stays.

But Robinson, a 7th-grade language arts teacher with the Shawnee Mission (Kansas) School District, is determined to not let that happen to her and her husband.

“We want to protect our children as much as we can from the burden,” said Robinson, who purchased long-term care insurance last summer after researching the topic. “We’re hoping, of course, never to use it.”Long-term care insurance isn’t an issue most people are eager to tackle. The idea of confronting questions about declining health and the ability to maintain basic, daily activities can be scary.

But the older people get, the greater the chance they’ll one day need long-term care. About 70 percent of Americans older than 65 will need at least some type of long-term care during their lifetime, according to the federal government’s National Clearinghouse for Long-Term Care Information.

And that care is not cheap. In 2008, the national average for one year of nursing home care was more than $68,000 and the average cost last year for a home health aide was $21 an hour.

So what is the answer? For some, like Robinson and her husband who are in their mid-50s, it’s long-term care insurance.“You get long-term care insurance to preserve your choices and save your money,” said Marilee Driscoll, author of The Complete Idiot’s Guide to Long-term Care Planning and speaker on the topic who operates the Web site www.LTC123.com.But long-term care insurance can be expensive, too—the average premium is $2,000 a year, according to Driscoll—and the older you are when you buy it the higher the premiums. The cost is also affected by the type of services covered, the length of coverage, whether it includes inflation protection, and other factors.

Driscoll recommends people research the cost of care in their area (visit the government’s clearinghouse Web site: www.longtermcare.gov/LTC/Main_Site/ index.aspx) and assess their financial and health situations. If they’re willing and able to spend what it might cost out of their own pocket, then perhaps insurance isn’t needed.

Of course, for those with few assets or who spend down their life savings, there is Medicaid. And that’s partly why Joseph L. Matthews, a California attorney and author of Long-Term Care: How to Plan and Pay for It, believes buying long-term care insurance is a gamble.“What it is, really, is a security blanket against the extreme situation—long-term nursing home care or round-the-clock home care,” said Matthews, who noted the insurance can be useful for some people. But, he added, “It’s not like anybody will be out on the street if you don’t have long-term care insurance.”

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